Oil advances after biggest surge since May on stimulus optimism

Bloomberg

Oil rises further after the biggest gain since May on growing optimism for more US fiscal stimulus and as President Donald Trump left hospital following treatment for Covid-19.
Futures added 1.2%, following Monday’s surge above $39 a barrel. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will resume talks on another round of pandemic relief funding, but there’s no sign yet they are close to a deal despite Trump’s urging to get it done.
Crude rises as part of a broader market relief rally, and aided by a strike in Norway that has shut fields and is curbing flows. Masses of people in China are vacationing during the Golden Week holiday, displaying the country’s confidence in its economic rebound and public health measures. But the outlook for global oil demand remains patchy with stricter lockdowns coming into force in parts of Europe.
“This week is shrouded in upside risks, placing demand concerns to the background,” said Kevin Solomon, analyst at brokerage StoneX Group in London. “The promise of fiscal stimulus will continue to be a supporting factor.”
Moves in oil futures curve was more circumspect, signalling underlying weakness. The nearest timespread for Brent gained only 1 cent and later contracts remain more expensive than nearer ones, showing oversupply.

Focus is also shifting to the weather with Hurricane Delta strengthening as it drifts toward the Gulf of Mexico. It could cause oil and gas production offshore Louisiana to shut down, and is threatening onshore refineries and shipping.